College Planning

Paying for college is one of the largest expenses most families face. Four years of private college may cost approximately $145,000 and public school $71,000.Total cost at four-year public colleges rose 6.3% for the 2006-2007 academic year Saving for college can be easier than ever.

Saddle River Capital Management can assist you with any of the following four college savings plans.

529 College Savings Plan

With a 529 plan such as our American Funds College America® – Named one of the top five 529 plans for 2006 by Morningstar – you can save for anyone — your child or grandchild, a niece or nephew, a friend or even yourself.

You can contribute up to $12,000 ($24,000 for married couples) annually without gift-tax consequences. Under a special election, you can invest up to $60,000 ($120,000 for married couples) at one time by accelerating five years’ worth of investments.

You can contribute until your account value reaches $250,000.

Earnings can grow tax-free.

Withdrawals for qualified higher education expenses are free from federal tax. Withdrawals for non-qualified expenses are subject to ordinary federal income tax plus a 10% penalty on the earnings.

There are no income limits. You can contribute no matter how much you earn.

You maintain control of the assets.

You can contribute up to $2,000 a year.

Coverdell Education Savings Accounts

Education savings accounts can be used to pay for your child’s qualified expenses from kindergarten through high school, 2 as well as for higher education.

You can contribute up to $2,000 a year.

Earnings can grow tax-free.

Withdrawals for qualified expenses are free from federal tax.

There are income restrictions. If your income exceeds certain limits, you will not be eligible to contribute.

For children under the age of 18, the first $850 of earnings is tax-free. Earnings between $850 and $1,700 are taxed at the child’s rate; earnings above $1,700 are taxed at the parents’ rate. All earnings for children age 18 and older are taxed at the child’s rate.

There are no income limits. You can contribute no matter how much you earn.

The beneficiary gains control of the assets at age of majority, which is age 18 or 21 in most states.

Parent’s Investment Account

Saving for your child’s education through a parents’ investment account allows you maximum control of the assets.

There are no contribution limits.

Earnings are taxed to the owner.

There are no income limits. You can contribute no matter how much you earn.

You maintain control of the assets and decide when withdrawals will be made.